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BOSTON — Litigation is mounting after Reserve Management Co., a firm that pioneered the money-market mutual fund nearly four decades ago, became the first ever to expose retail clients to losses by "breaking the buck." It was among a handful of funds that earned that dubious distinction last week — a first since 1994.

Though money funds are generally viewed to be nearly as safe as cash, plaintiffs can't expect to recover losses just because fund managers allowed assets to fall below $1 for each dollar put in.

Investment accounts are subject to losses and money-market funds are no exception. Investors looking for legal recourse may have a tough road ahead. To win in court or recoup losses through any action by regulators, investors likely will have to show misconduct on the part of a fund's managers, such as favoring certain clients over others, or making riskier investments than were allowed under the fund's criteria, legal observers say.

Such allegations are at the heart of a handful of lawsuits believed to be the first filed over an instance of breaking the buck at a money fund.

Such funds are normally a safe haven for the 33 million American households and institutional clients, such as corporations and pension funds, that invest some $3 trillion in assets.

At least three complaints that seek class-action status have been filed against the Reserve Management's Primary Fund since it broke the buck last Tuesday. And Ameriprise Financial Inc. is suing as well, alleging the Primary Fund's managers tipped off favored institutional clients about the fund's troubles before Ameriprise's retail brokerage customers could respond to pull their money out.

"If in fact these allegations are true — that some high-level people at Reserve's management effectively favored certain investors over others and violated their fiduciary duty — that would be in my opening argument," said Geoffrey Miller, a law professor and director of New York University's Center for the Study of Financial Institutions.

But losses from failing to provide investors a dollar-for-dollar return is not grounds for recovery, plus money-market mutual funds include warnings about such risks in bold letters, said Michael Gallo Jr., a specialist in financial law with DeCotiis, FitzPatrick, Cole & Wisler in Teaneck, N.J.

If evidence of possible misconduct such as tipping certain clients appears strong, regulators such as the Securities and Exchange Commission could bring a case that parallels the recently filed lawsuits, Gallo said.

SEC spokesman John Heine declined to comment Monday on whether the agency was looking into the Primary Fund's managers, Reserve Management Co., and a spokeswoman for the New York-based firm didn't return messages seeking comment on the lawsuits' allegations.

The Primary Fund — the first money-market fund established in 1970 — was the largest and first among at least three Reserve Management Co. funds that broke the buck last week amid market turmoil following the bankruptcy filing by Lehman Brothers Holdings Inc.

What happened at the Primary Fund was particularly notable because individual retail investors — along with institutional clients — were exposed to losses.

Typically, when assets might fall below the dollar-for-dollar level, fund managers infuse money from other parts of the firm's operations to bolster the troubled fund. When a fund suffers a sudden rush of orders to pull out money, managers must sell their most liquid assets first, and then unload other holdings — typically at a steep loss when it must be done quickly in a volatile market.

On a positive note for investors, the chance of another fund breaking the buck dwindled Friday after the federal government said it would tap into a $50 billion fund and temporarily provide money funds guarantees similar to those offered to bank savings accounts.

But the government's yearlong program doesn't extend those guarantees to funds that broke the buck before Friday, so many Primary Fund investors can expect losses.

The problem stems from Primary Fund holdings of $785 million in unsecured debt of Lehman Brothers — written down to zero after the investment bank filed for bankruptcy Sept. 15.

Once word of the Lehman exposure got out, the $64 billion fund's managers were swamped by investors wanting to pull out their money. After assets plunged to $23 billion, the fund announced Sept. 16 that its asset value had dropped to 97 cents for each investor dollar. Only investors who redeemed before a midafternoon cutoff time Sept. 16 were guaranteed a dollar-for-dollar return.

The Ameriprise lawsuit, filed Friday in federal court in Minnesota, alleges fund managers "secretly notified a number of major institutional investors" about the Lehman exposure on the morning of the bankruptcy filing, and also advised of the risk of breaking the buck.

The lawsuit doesn't name which investors allegedly were tipped, and Robert Skinner, an attorney representing Ameriprise with Boston-based Ropes & Gray, said in a phone interview Monday that he hopes to learn those investors' identities in discovery.

The lawsuit says Ameriprise employees spoke with two fund officials last Thursday who allegedly explained that Reserve Management "had previously tipped the institutional investors about the fund's likelihood of breaking the buck, and seemed surprised that Ameriprise had not also been tipped at the same time."

Ameriprise says it had invested more than $3 billion in the Primary Fund on behalf of more than 300,000 client accounts through brokerage subsidiaries. In addition, Ameriprise says it invested some $128 million of its own money in the fund.

Other lawsuits that seek class-action status make similar allegations and accuse the fund's managers of making riskier investments than allowed under the fund's prospectus.

Miller, the NYU professor, predicted more such complaints are likely to emerge in coming days.

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